Authored by Naveen Athrappully via The Epoch Times (emphasis ours),
President-elect Donald Trump said on Dec. 3 that he would prevent the acquisition of U.S. Steel Corp. by Japan’s Nippon Steel Corporation.
“I am totally against the once great and powerful U.S. Steel being bought by a foreign company,” the president-elect said in a post on the social media platform Truth Social. “Through a series of Tax Incentives and Tariffs, we will make U.S. Steel Strong and Great Again, and it will happen FAST! As President, I will block this deal from happening. Buyer Beware!!!”
The $14.9 billion deal to buy U.S. Steel was unveiled in December last year. If the transaction goes through, it would make U.S. Steel a wholly owned subsidiary of Nippon Steel.
The Japanese corporation had offered an all-cash deal, with shares priced at $55, a 40 percent premium at the time. U.S. Steel was trading at almost $41 by the end of Monday.
In 2018, the Trump administration slapped 25 percent tariffs on imported steel via a legal provision that allows U.S. presidents to curb imports if they pose a threat to national security.
While the tariff was challenged by a New Jersey-based steel importer, the U.S. Court of International Trade sided with Trump, saying it was within his presidential authority to implement tariffs.
As part of the deal, the Japanese company agreed to retain the U.S. Steel name as well as the Pittsburgh headquarters once the takeover was complete. It also committed to honoring the employee contract agreements that U.S. Steel has with the United Steelworkers (USW) union.
Trump had opposed the deal back in January this year. After meeting with the Teamsters labor union president, Trump called the transaction a “terrible” deal and said he would “block [the deal] instantaneously” in his second term.
According to data from the World Steel Association, Nippon Steel was the fourth-largest steel-producing company last year, with U.S. Steel in the 24th position.
The multibillion-dollar deal has the backing of U.S. Steel shareholders. During a vote on the issue, 98 percent of shareholders supported the merger.
Lawmakers have opposed the takeover transaction. In a December 2023 letter to the Treasury secretary, three Republican senators warned that allowing Nippon Steel to acquire U.S. Steel would have “dire implications for the industrial base of the United States.”
Sens. JD Vance (R-Ohio), Josh Hawley (R-Mo.), and Marco Rubio (R-Fla.) said that domestic production of steel is “vital” to America’s national security.
“[Nippon Steel] does not share U.S. Steel’s storied connection to the United States, and its financial interests are tied into those of Japan,” the letter said.
Last year, Nippon Steel Corp. (NSC) “received more than $3 billion in subsidies from Japan’s Ministry of Economy, Trade, and Industry,” according to the letter.
“And NSC has even flouted American trade law. As recently as August 2021, NSC was found guilty of unlawfully dumping flat-rolled steel products into the U.S. market,” the letter said.
The senators asked for the acquisition to be blocked as Nippon Steel’s allegiance “clearly” lies with a foreign state.
In early January, the federal government said that the deal required “serious scrutiny.” In March, President Joe Biden said it was vital for a U.S. steel company to remain “domestically owned and operated.”
An arbitration board, selected jointly by U.S. Steel and USW union, green-lit the transaction in September. USW had argued that the deal threatened the long-term job security of its members as well as their retirement benefits.
However, the board ruled that Nippon Steel provided enough assurances to the union, including recognizing USW as the bargaining representative for workers.
USW disagreed with the ruling, stating, “Nippon’s commitment to our facilities and jobs remains as uncertain as ever, and executives in Tokyo can still change U.S. Steel’s business plans and wipe them away at any moment.”
Autos Drive America, an organization representing carmakers, supports Nippon’s takeover of U.S. Steel.
It said in a June letter to the White House’s National Economic Council that Nippon Steel has a four-decade-old history in the United States. Allowing the transaction will “enhance productivity, drive innovation, and support the overall competitiveness of the U.S. steel industry on the global stage,” it said.
“Investments that expand production capabilities in the United States only bolster our national security capabilities,” Autos Drive America wrote.
The Epoch Times reached out to U.S. Steel for comment regarding Trump’s remarks but received no reply by publication time.